6us73 ,<plain the ma$or environmental factors a business strategist should considerwhile formulating business strategies.(nswer7
%ll these and many other such cases point to an important facet of business' sensitivity of strategy to the eternal environment" The major environmental factors a business strategist should rec&on !ith are: *olitical
6us74 ,<plain orporate &estructuring using e<amples.(nswer7
means organizational change to create a more efficient or profitable enterprise" +imilar terms !hich are used for restructuring- are revamping-,regrouping-,
6us7" ,<plain )ichael , %orter=s ompetitive hreat )odel with suitable e<amples.(nswer7
% vital tas& of a strategist is to anticipate and/or recognize the nature of competitionand potential threat from competitors and to develop appropriate response strategies" Themost difficult tas& in this is to properly assess the magnitude of eisting competition andcorrectly foresee the threat from ne! and emerging competitors" *orter (.01) in his pioneering !or&
6us7> ,<plain whether ?eadership style is %ortable; (lso e<plain the leadership &ole of op )anagement.(nswer7
2ohria and others (3114) have researched on a very interesting subject: 5sleadership or leadership style portable6 #r, to put it in another !ay: ill a leader, successfulin one organization, be necessarily successful in another company6The authors studied
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Master of Business Administration- MBA Semester 4
MB0052– Strategic Management and Business Policy - 4 Credits
(Book ID: B1314)
The further classification of expansion strategy is as follows:—
- Diversification is a process of entry into a new business in the organization either marketwise or technology wise or both. Many organizations adopt diversification strategy to minimizethe risk of loss. It is also used to capitalize organizational strengths.Diversification may be the only strategy that can be used if the existing process of an organization isdiscontinued due to environmental and regulatory factors.The two basic diversification strategies are:°
The organization adopts concentric diversification when it takes up an activity that relates to thecharacteristics of its current business activity. The organization prefers to diversify concentrically either in terms of customer group, customer functions, or alternative technologies of the organization. It is alsocalled as related strategy.°
The organization adopts conglometric diversification when it takes up an activity that does not relate tothe characteristics of its current business activity. The organization chooses to diversifyconglometrically either in terms of customer group, customer functions, or alternative technologies of the organization. It is also called as unrelated diversification.—
– Concentric expansion strategy is the first route towards growth in expanding thepresent lines of activities in the organization. The present line of activities in an organization indicatesits real growth potential in the present activities, concentration of resources for present activity whichmeans strategy for growth.The two basic concentration strategies are:°
The organization adopts vertical expansion when it takes over the activity to make its own supplies.Vertical expansion reduces costs, gains control over a limited resource, obtain access to potentialcustomers.°
The organization adopts horizontal growth when it takes over the activity to expand into other geographical locations. This increases the range of products and services offered to the currentmarkets.
Retrenchment strategy is followed by an organization which aims to reduce the size of activities interms of its customer groups, customer functions, or alternative technologies.
– A healthcare hospital decides to focus only on special treatment to obtain higher revenueand hence reduces its commitment to the treatment of general cases which is less profitable.Different types of retrenchment strategies are:—
– Turnaround is a process of undertaking temporary reduction in the activities to makea stronger organization. This kind of processing is called downsizing or rightsizing. The idea behind thisstrategy is to have a temporary reduction of activities in the organization to pursue growth strategy atsome future point.Turnaround strategy acts as a doctor when issues like negative profits, mismanagement and decline inmarket share arise in the organization.